Chapter 8. Organizational Demand Analysis BA 303 - L.P.Chew

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Chapter 8. Organizational Demand AnalysisBA 303
- L.P.Chew

• OUR TERMINOLOGY
• POTENTIAL POSSIBILITIES
• FORCAST EXPECTATIONS
• MARKET INDUSTRY
• SALES COMPANY

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The formulation of market strategy is planned on
the basis of the marketing potential associated
with each of the firm's target segments

• Once marketing strategy plans are set, a sales
  forecast can be developed and then used to guide
  tactical production, advertising, and logistics
  decisions

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Chapter 8. Organizational Demand Analysis

• pivotal role of market potential analysis and
  sales forecasting in planning and controlling
  marketing activities, and to provide a firm
  understanding of the various approaches for
  measuring potential and forecasting sales.

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Chapter 8. Organizational Demand Analysis

• chapter focuses on the different approaches for
  calculating market and sales potentials
• qualitative and quantitative forecasting
  approaches are discussed in terms of the
  applicability to various forecasting situations.
  Executive judgment, sales force composite, and
  the Delphi method are the qualitative forecasting
  methods

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Chapter 8. Organizational Demand Analysis

• Quantitative methods, including time series
  analysis and causal techniques
• Executive judgment, sales force composite, and
  the Delphi method are the qualitative forecasting
  methods
• These qualitative methods are most effectively
  applied to forecasts for new products or in
  situations where little historical data exists

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Methods of Sales Forecasting (1)

• Simple Trend Analysissales forecast based on
  firms recent performance.
• Market Share Analysissimilar to trend
  analysis but assumes market
  share will stay the same.
• Jury of Executivescompany experts predict sales.
• Sales Force Surveyssalespeople share experiences
  and customer feedback.
• Consumer Surveysmeasure attitudes, purchase
  intentions, expectations, consumption rates, and
  SWOT.

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Methods for Sales Forecasting (2)

1. Chain-Ratio Methodfirm starts with general
   market information and then computes a series of
   more specific information. Combined data yield a
   sales forecast.
2. Market Build Up Methodfirm gathers data from
   small, separate market segments and aggregates
   them.
3. Test Marketsales estimate from short-run,
   geographically limited sales of new products.
4. Advanced Statistical Analysesmethods for sales
   forecasting that include computer simulations

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TIME SERIES

• Time series models are based on the accuracy of
  historical sales patterns when sales trends are
  not likely to change in the future. Time series
  models are most useful when market forces are
  relatively stable within forecasting horizon.

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Moving averages/ exponential smoothing

• Moving averages is a method based upon a
  specified historical period to forecast the
  value for a future period.
• When differential weights are desired, such as
  for recent years, exponential smoothing can be
  used.

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Multiple regressions models

• Multiple regressions models, employed when a
  number of factors have an impact on sales, allow
  managers to forecast industry sales, as well as
  incorporate the expected effects of any
  controllable marketing variables which are likely
  to be significant when forecasting company sales.

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Sales penetration is the degree to which a
company achieves its sales potential. A high
level of sales penetration usually means
there is little room for growth. 1. Sales
penetration Actual sales/Sales potential.
2. A firm with high sales penetration must
realize that diminishing returns may occur if it
attempts to convert remaining nonconsumers,
since costs may outweigh revenues. Other
segments may be better opportunities.

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LINDELL MANUFACTURES INK FOR FOUR TYPES OF
PRINTERS IN FIVE STATES.HISTORICAL SALES DATA
SHOWS THAT INK COSTS THESE PRINTERS .1 OF EACH
SALESDOLLAR.

• HOW MUCH INK DID THEY CONSUME IN THE MOST RECENT
  YEAR THAT YOU ARE ABLE TO FIND IN OUR LIBRARY. I
  SUGGEST THAT YOU USE THE 1997 CENSUS OF
  MANUFACTURESOR THE MOST CURRENT ANNUAL SURVEY OF
  BUSINESS (MANUFACTURES).

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LINDELL MANUFACTURES INK FOR FOUR TYPES OF
PRINTERS IN FIVE STATES..

• PLEASE CONSULT YOU PACKET FOR A LIST OF SECONDARY
  DATA SOURCES TO ACCESS INCLUDING THE
  AFOREMENTIONED. KEY USE VALUE OF SHIPMENTS.
• YOU MAY WORK WITH THE SIC CODES, RATHER THAN THE
  NAICS CODES, BECAUSE THEDATA MAY BE EASIER TO
  FIND IN SIC, WHILE WE ARE IN TRANSITION FROM SIC
  TO NAICS

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LINDELL MANUFACTURES INK FOR FOUR TYPES OF
PRINTERS IN FIVE STATES..

• STATES.....PENNSYLVANIA, OHIO, MICHIGAN, INDIANA
  AND ILLINOIS
• SIC / NAICS CODES OF PRINTERS.........
• 2711- NEWSPAPERS
• 2721- MAGAZINES
• 2732- BOOK
• 2751- COMM LTR HD PRESS. PRINTING

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LINDELL MANUFACTURES INK.

• A- WHAT WAS THE TOTAL INK/PRINTER MARKET FOR THIS
  FIVE STATE REGION?
• B- WHAT IS THE TOTAL MARKET BY STATE?
• C- WHAT IS THE RELATIVE MARKET FOR EACH STATE?
• D- HOW WOULD YOU PROJECT THE MARKET FOR THE
  COMING YEAR 2002?